Patent reform: Supporting or stifling U.S. innovation?

Obama administration pushes for changes

BSA: The Software Alliance, a company that represents software companies, commended some of the proposals, such as improving transparency and giving courts more discretion to shift fees. But the company also warned that some of them could be problematic.

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"Singling out computer-enabled inventions as (a) class could inadvertently put at risk innovation for many industries that rely on software, from manufacturing to biotech," BSA Senior Vice President for External Affairs Matt Reid said in a statement.

"The America Invents Act includes business-method provisions that have been in effect for only six months. Rushing to broaden them before we see the results doesn’t make sense," Reid said.

Unfortunately, the actions and recommendations could have the opposite effect the Obama administration is looking for, increasing litigation instead of suppressing it, notes Gerst.

Specifically, two of the legislative proposals related to demand letters try to regulate what needs to be included in them, which could make them more complex. Patent owners typically use demand letters to initiate contact with infringers and inform them of the potential infringement.

In an effort to settle the dispute without litigation, the letter typically requests cessation of the infringing activity or asks for the license to be paid. Gerst said that patentees are more likely to just file suit than go through a potentially onerous process of sending demand letters. That could increase the amount of litigation.

Understandably, some of the details of these proposals need to be hashed out.

"This is such an important area to the American economy, we need to make sure that what we're doing is actually going to be constructive and is well thought through," Gerst said.